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UAW ratifies labor deal with General Motors

General Motors dives into the mining industry - Picture of the company's logo
General Motors dives into the mining industry - Picture of the company's logo

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The preliminary labor contract that General Motors (GM.N.) had been negotiating with the United Auto Workers (UAW) union has been ratified, making General Motors’ employees the first of any Detroit Three automakers to sign the pact.

The focus is shifting to the vote at Ford (F.N.) and Chrysler parent Stellantis (STLAM.MI), where the existing margins in favor of the merger signal that it will be approved quickly.

After an unprecedented six-week campaign of synchronized strikes at all three automakers focused on improving workers’ salaries, the vote seals the provisional agreement that the UAW has reached with G.M. After several years in which autoworkers’ wages remained unchanged, the union was forced to make difficult compromises due to the 2008 financial crisis, but the marriage was ultimately successful in negotiating record pay increases for auto workers.

The vote monitoring site for the UAW’s representation of GM workers reveals that acceptance of the deal is leading by a margin of 55% to 45%, with roughly 36,000 workers out of around 46,000 UAW-represented GM workers having cast ballots. Every single voting facility has reported the results of the vote.

The United Auto Workers (UAW) and General Motors (GM) officials did not immediately comment. During trading on Thursday, G.M. shares experienced a loss of 1.1%.

Although the majority of votes had already been cast on Wednesday, voting will continue until Thursday at 4 p.m. Eastern Standard Time (2100 GMT). The United Auto Workers (UAW) has not yet made an official announcement about the ratification. Still, if it were to occur, it would be the first approval of an agreement with one of the Detroit Three automakers that lasts until April 2028. The voting process is currently taking place at Ford and Stellantis.

About two weeks ago, the three businesses reached “tentative agreements.” Seven of G.M.’s eleven assembly factories rejected the agreement. However, the main assembly factory in Arlington, Texas, and assembly factories in Detroit, Fairfax, Kansas, and Lake Orion, Michigan, approved the arrangement.

The new deal between the UAW and G.M. gives a 25% rise in base salary through April 2028 and will cumulatively boost the top wage by 33%, combined with expected cost-of-living increases to over $42 an hour. Additionally, the base wage will rise by 33% throughout the agreement.

According to the data provided by the UAW, around 67% of workers at Ford who have voted support the UAW contract. In comparison, approximately 66% of workers at Stellantis have so far voted in favor of the agreement. Voting is expected to wrap up for Ford on Friday, while it will end for Stellantis on Tuesday of the following week.

Automakers were lowering costs and crossing a difficult path in the past to produce EVs and catch up with the market leader Tesla (TSLA.O), but lower margins on those cars have stopped them from speeding the transition. Tesla is now leading the industry in electric vehicle sales.

As a result of the strike, General Motors withdrew its prediction for full-year profits in October and postponed the construction of a $4 billion electric truck facility in Michigan.

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